Category: Stock Market News

Shares of General Motors Co. sank 2.2% in midday trade Thursday, after a Bloomberg report that the automaker was being sued by consumers for installing devices in its trucks to beat emissions tests, similar to Volkswagen AG’s highly-publicized scandal in 2015. The Bloomberg report said the class-action suit was filed in Detroit by people who own or lease more than 705,000 GM Duramax diesel trucks, and not by a government agency. The suit alleges that GM’s defeat devices allowed its trucks to pass inspections even though the trucks spewed emissions up to five times the legal limit under regular driving conditions, the report said. The report does not say the damages being sought. Earlier, the stock was down as much as 3.9% at 6 1/2-month low of $31.92 in intraday trade. The stock has now lost 6.8% year to date, while the S&P 500 has gained 7.8%.

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Shares of Amazon.com Inc. surged 1.8% in morning trade Thursday toward a fourth-straight record closing high, bringing them to within a fraction of the $1,000 mark. The stock traded at a all-time intraday high of $998.31 earlier, or just 0.2% away from the four-digit threshold. The stock is on pace to reach its ninth record close this month, and 21st record this month. The stock has run up 33% year to date, while the S&P 500 has gained 8% and the Nasdaq Composite has climbed 15%. Of the 45 analysts surveyed by FactSet, 30 have price targets above $1,000, with an average target of $1,090.03.

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Burlington Stores Inc. shares surged 6% Thursday, after the discount retailer posted better-than-expected profit for its latest quarter. MKM Partners reiterated their buy rating on the stock and said it believes trends have improved. Burlington said it had net income of $52.4 million, or 73 cents a share, in the quarter, up from $37.5 million, or 57 cents a share, in the year-earlier period. Adjusted per-share earnings came to 79 cents, ahead of the FactSet consensus of 70 cents. Sales rose 5% to $1.35 billion, just below the FactSet consensus of $1.36 billion. Same-store sales rose 0.5%, missing the FactSet consensus for a rise of 2.4%. The company said it now expects same-store sales to grow 2% to 3% for the rest of the year, yielding a full-year forecast of 1.6% to 2.4%. It expects full-year EPS of $3.86 to $3.96. FactSet is expecting full-year EPS of $3.89. “While the comp fell short of expectations and while we were hoping for better, we note that March/April rose 4.5%, and May was said to be off to a strong start,” MKM analyst Roxanne Meyer wrote in a note. “We’d also note that new store productivity remains exceptionally robust.” Shares have gained 17% in 2017, while the S&P 500 has gained 7%.

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Tesla Inc. shareholder Connecticut Retirement Plans and Trust Funds urged other shareholders to declassify the car maker’s board to “better meet challenges the company now faces as a maturing public company,” it said in a Securities and Exchange Commission filing Thursday. The state pension fund is pushing for the annual election of directors. Tesla staggers the elections and at this year’s June 6 shareholder meeting three out of seven directors stand for reelection. The board “appears to have changed little since Tesla went public,” the pension fund said in the filing. “We see the annual election of directors as essential to motivating the board to address these concerns and ensuring Tesla’s long-term success,” it said. Tesla’s board has opposed that proposal, and said last month the staggered terms allow directors to focus on the long term. At the meeting, shareholders will be asked to vote for three directors to serve three-year terms on the company’s board, among other items on the agenda. The nominees for directors are Chief Executive Elon Musk, Robyn M. Denholm, and Stephen J. Jurvetson. Denholm, a former Juniper Networks Inc. executive who in January became chief operations officer of telecommunications company Telstra Corp., has been a Tesla board member since 2014. Jurvetson, a managing director at venture capital firm Draper Fisher Jurvetson, has been a board member since 2009. In the filing Thursday, the Connecticut pension fund noted that several Tesla board members, including Jurvetson, have business relationships with CEO Elon Musk.

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Federal Reserve Board Governor Lael Brainard said Thursday there is now less risk to the U.S. economy due to a healthier global economy. “As I look out at the global economy today, it is brighter than it has been probably for the last few years,” Brainard said. The euro-area is growing more solidly, the Fed governor said. Growth has stabilized in Japan, and emerging markets are also doing better, she added. There is likely to be a sustained upward revision to foreign growth for the first time in about three years, she noted. “The balance of risks has shifted because the downside risks from some of those foreign economies…have greatly improved,” she said. Some political events are “now in the rear-view mirror,” she said.

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President Donald Trump said Thursday he is ordering the Justice Department and other agencies to launch “a complete review” of alleged leaks coming out of U.S. government agencies. Trump’s statement comes as British officials are outraged over alleged U.S. leaks of investigative material related to the Manchester bombing. Trump said there is “no relationship we cherish more” than that of the U.S.-U.K relationship. Trump is due to meet U.K. Prime Minister Theresa May Thursday at a NATO summit in Brussels.

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Data from the U.S. Energy Information Administration Thursday showed that domestic supplies of natural gas rose by 75 billion cubic feet for the week ended May 19. Analysts surveyed by S&P Global Platts forecast a build of 67 billion cubic feet. Total stocks now stand at 2.444 trillion cubic feet, down 371 billion cubic feet from a year ago, but 241 billion cubic feet above the five-year average, the government said. June natural gas fell 2.6 cents, or 0.8%, from Wednesday’s settlement to $3.183 per million British thermal units. It traded at $3.205 before the data.

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Stocks opened slightly higher Thursday, with the S&P 500 and Nasdaq Composite posting intraday records. The S&P 500 rose 3.98 points, or 0.2%, to 2,408.37, while the Nasdaq Composite rose 18.21 points, or 0.3%, to 5,181.23. The Dow Jones Industrial Average advanced 48.48 points, or 0.2%, to 21,060.90

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Fitch Ratings downgraded Signet Jewelers Ltd.’s to BB from BB-plus on Thursday, moving it further into junk territory, just hours after the retailer reported weaker-than-expected quarterly earnings. The move “results from ongoing weak operating trends, lower-than-expected debt reduction following the proposed partial sale of Signet’s consumer financing business and the company’s updated financial policy, all of which combine to yield expectations of leverage trending above 4.0x in the medium term,” Fitch said in a statement. Signet also announced plans to outsource its credit portfolio over time, beginning with the sale of $1 billion of prime receivables to Alliance Data Systems Corp. . The company will use the proceeds of that sale to repay an ABS facility of $600 million and for share buybacks. Fitch said it expects the loss of financing income and the costs of outsourcing to reduce annual EBITDA by about $50 million, which is half the total that the financing business generates. Signet shares were down 1.3% and are down 43% in 2017, while the S&P 500 has gained 7%.

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Tiffany & Co. said Thursday that it has raised its quarterly dividend by 11% to 50 cents per share from 45 cents per share. The company has raised its dividend rate 16 times in the last 15 years, said Chief Executive Michael Kowalski in a statement. The dividend will be paid on July 10, 2017 to shareholders of record as of June 20, 2017. Tiffany shares are nearly flat in premarket trading, and up more than 33% over the past 12 months. The S&P 500 index has gained 15% for the last year.

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